Duty-free shops covered under GST

Authority for Advance Ruling (AAR) said that goods sold “duty-free” shops at Delhi’s IGI Airport are not “free from duties” under the tax regime and thus liable to GST.

In the earlier tax regime, i.e. prior to July 1, 2017, the duty-free shops were exempt from the levy of central sales tax and value added tax as sales from such shops were considered as exports and supply was taking place beyond the “customs frontiers” of India. The AAR Delhi bench in a recent ruling held the supply of goods to flyers going abroad from duty free shops may be taking place beyond the customs frontiers of India under the Integrated GST Act but the said shops are within the territory of India under the GST Act.